In an article about taking better photos with your smartphone, PC Magazine offers this easy flash-hacking tip and an example of the softer effect you might get with diffusing (wax paper shot on the left, naked iPhone 5 flash on the right):

Depending on what type of case you use to protect your phone, it shouldn't be that hard. Grab some wax paper from the pantry and use it to the cover up the flash. This will be easiest if you have a case that covers the entire back of your phone, with a cutout for the flash and lens. I took a few quick snaps here in the PCMag Labs and the difference is subtle; portraits with the naked flash resulted in a bit of harsh light that was downright unflattering, but adding the wax paper softened it a bit. The difference is subtle, but considering how easy it is to implement, why not do it?